The Perils of Going from Community to Commercial Open Source

The growth and corporate adoption of many community open source projects is hindered by the lack of commercial support. At the same time, well working community open source is a temptation for startups to make a buck by turning the community project into commercial open source. We can currently observe the unraveling of such a story.

TWiki is a community open source project, a successful wiki engine, and the company TWIKI.NET is trying to turn it into a commercial open source project. This post discusses some of the levers and dynamics of this process. But first, to clarify terms: Community open source is open source owned by a community with no single dominant stakeholder, and commercial open source is open source owned or dominated by a single legal entity, typically a software firm that wants earn money with it.

The role model of all startups commercial open source is MySQL and its dual-license strategy. MySQL provides a free edition to the community under the GPL license and sells usage rights to its commercial customers under a commercial license. This is possible, because MySQL owns all the rights to the code. The purpose of the free version is to get a foot into the door of future customers and eventually upsell them to the commercial version. This go-to-market strategy is also known as the dual-license strategy, and most commercial open source software startups are modeled this way.

Now, the story: TWiki consists of single-license GPLed code, developed by a broad community, as led by its founder, Peter Thoeny. All of the developers maintained their copyright so there is no single owner of the code. This makes TWiki a true community project. It also makes it near to impossible to change anything significant about the project since you need everyone to agree. Thus, it seemed like TWiki was destined to remain a community open source project forever.

Enter TWIKI.NET. In late 2006, Peter co-founded TWIKI.NET, a software startup in the business of commercializing TWiki. I have always wondered why venture capitalists would invest in TWIKI.NET given that the company does not own the product. I assumed (and now we know) that Peter owned the domains twiki.org and twiki.net as well as the trademark to the term twiki. As part of the venture capital investment he apparently sold some of the rights to TWIKI.NET respectively remains a shareholder whose interests are aligned with those of TWIKI.NET.

Turning a community open source project into a commercial open source product is tricky. A prior existing developer community has its own ways, and changing them to suit the needs of a company and what the company perceives as “professional software development” is hard. Volunteer developers are much less predictable than employees. Stakeholders that you can’t command may object the way you want to handle product management. And competing interests by other companies may wholly get in the way of your strategy for the product. That’s why VCs typically don’t invest into companies formed around community open source projects.

Intellectual property ownership (“protection”) is at the core of many a VCs concerns. If you don’t own the code, and it is single-license GPL code, how can you create a sustainable competitive advantage over a possible competitor? Use of the GPL requires you to share your code with the community as soon as you try to sell it (redistribution clause). TWIKI.NET must have found ways around this in its commercial product offering, either by new ways of coupling code or wholly separating their commercial offering from the GPLed community project. Also, in this case, Peter’s initial ownership of the TWiki trademark seems to have been a sufficient lever to convince the VCs that commercial competition won’t spring up or could at least be kept at bay with the threat of trademark infringement lawsuits.

On with the story. According to this article, using his root access privileges, Peter Thoeny changed twiki.org, the main project website, to implement a new governance model. This governance model had been under discussion with the community, but without apparent conclusion. Hence, Peter acted unilaterally in what I assume he felt was in the best interest of TWiki the project and TWIKI.NET. The new governance model looks like a variation of prior existing models with a focus on getting product management and release planning onto more orderly tracks than may have existed before. Most importantly, however, the new rules state that “Peter Thoeny, the Founder of the project, and TWIKI.NET, collectively own the trademarks to the TWiki project, who have the sole discretion in decisions related to these matters” and that Peter is appointed the BDFL, the “Benevolent Dictator for Live”. These changes had not been agreed to and signed off by the community.

A few days later, the core developers left the project and created a fork. In their recollection of the events leading up to the fork, they argue that Peter Thoeny’s respectively TWIKI.NET’s ownership of the trademark represents a threat to their livelihood as TWiki consultants as attempts to create a safe future for them in the TWiki ecosystem had failed. The dangling threat of getting punished when “misbehaving” from TWIKI.NET’s perspective is just too obvious.

Obviously, the TWiki project is in a precarious situation now. Will it be able to maintain or recreate a competent developer community? Will it be able to compete with the fork? TWIKI.NET can’t take the community project private without completely rewriting it from scratch because it is single-licensed GPL code. Hence any further development by TWIKI.NET that is not separated from the project can be fed into any other GPLed project, including the fork. Thus, what I’m learning is that a trademark can be as potent an intellectual property as can be copyright. Clearly, a nightmare situation, but one that seems preordained in the setup of the community project.

The fork is tentatively called NextWiki and it points back to the TWikiFork website.

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3 Replies to “The Perils of Going from Community to Commercial Open Source”

Thank you for these insights – really interesting read from the delicate crossroads of online communities and internet entrepreneurship.
For competitive advantage : You’ve written earlier about when companies use their support and investments in the open source community to gain competitive advantages in other areas than the sale of software (services, consultancy, hardware etc.). Seems to me the best option for a startup rooted in or dealing with open source is to keep the software open source/GPL’ed and create a business model on something related. Say, like Wikia or Mahalo has done based on MediaWiki.

As a user, it is fun to have a really free software package written by real freaks. It does not cost anything, and the guys just write it for fun.
That is the way to go. Fame is free, and if software is written just for fame, it is free, period. That is the way to go.